Crucially, Piketty contends that such a concentration is not an accident: Instead, the “rich get richer” phenomenon is a fundamental feature of the way that income and wealth are distributed in modern-day capitalism, for a straightforward reason: The rate of return to capital, over the long term, is higher than the rate of return to labor.

Capital-income inequality is thus self-perpetuating. As Furman explained: “How much wealth you have today is a function of how much income you had in the past, and a function of your rate of return, which itself is higher for higher-wealth households.”

“A market economy based on private property, if left to itself, contains powerful forces of convergence, associated in particular with the diffusion of knowledge and skills. But it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based.

“The principal destabilizing force has to do with the fact that the private rate of return on capital, r, can be significantly higher for long periods of time than that rate of growth of income and output, g. Wealth accumulated in the past grows more rapidly than output and wages.

“The inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future.

“The consequences for the long-term dynamics of the wealth distribution are potentially terrifying, especially when one adds [the fact that] the return on capital varies directly with the size of the initial stake and [the fact that] the divergence in the wealth distribution is occurring on a global scale.”

If Piketty's deterministic analysis were to sow defeatist despair – a feeling that ever-worsening inequality is inevitably "just the way the system is destined to work" – it might deflate the pressure for activist reforms. Counseling against fatalism, however, Furman said that “I wouldn’t be too defeatist” about the irreversibility of the trend that Piketty discerns. He asserted that the Obama Administration’s changes to tax policy, and the adoption of the Affordable Care Act, in 2009 and 2010 had helped overcome a decade’s worth of growing inequality.

Furman noted that some of the Bank’s economists have not (or at least, not yet) “fully endorsed” the Piketty-like perspectives advanced in recent months by the IMF – whose researchers issued an influential “IMF Staff Discussion Note” with Piketty-like ideas on the importance of promoting stability by restraining runaway inequality. IMF Managing Director Christine Lagarde has been outspoken about the urgency that the IMF has devoted to the issue: “I hear people say, ‘Why do you bother about inequality? It is not the core mandate.’ Well, sorry, it is also part of the mandate. Our mandate is financial stability. Anything that is likely to rock the boat financially and macroeconomically is within our mandate.”

Yet, in their more lucid moments, there's a tone of grudging respect within at least some of their denunciations. Notably, a scholar at the American Enterprise Institute – a think tank that lately seems to be softening some of the hard edges of its rhetoric about the supposed magic of lightly regulated markets – has admitted that “Piketty and . . . inequality researcher Emmanuel Saez [of the University of California at Berkeley] are arguably the most important public intellectuals in the world today.”

Furman’s DEC Lecture clarified the insights within Piketty’s research – and echoed some of the points that Freeland made in her earlier InfoShop forum, about how to “make capitalism better and [make it] work better” and about how to make the market-based economy more sustainable for the long run. Enlightened self-interest should lead the plutocratic class to “be out there advocating for a wealth tax” to reduce inequality, said Freeland, if only to forestall an eventual rebellion.

As a proud but increasingly nervous member of the plutocratic One Percent recently wrote, “peasants with pitchforks” will someday threaten the monied oligarchy if there is no way to ease the intensifying social tensions. "Inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society," wrote wealthy entrepreneur Nick Hanauer in Politico. "Unless our policies change dramatically, the middle class will disappear, and we will be back to late-18th-century France. Before the revolution. . . . It won’t last. If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. . . It’s not 'if,' it’s 'when.' "

The insights of Furman and Freeland, in their recent DEC Lecture and InfoShop presentations, reminded the World Bank Group audiences and their colleagues in the global development community that far-sighted economic policies, along with appeals to enlightened self-interest, can help build economic resilience. Sound planning for sustainable growth can maximize the wealth-creating benefits of well-regulated markets – while helping avoid the excesses of the wealth-concentrating “forces of divergence” that can destabilize economies by undermining shared prosperity.

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